Penny Wong theguardian.com, Wednesday 23 October 2013

Having spent their election campaign talking down the Australian economy, the Coalition can now apparently afford a $500bn debt ceiling

A man inserts a five Australian dollar note into a slot machine at Bowlers Club in Central Sydney. Photograph: Daniel Munoz/Reuters

It‘s been just over one month since the Abbott government was sworn in, and already Australians have seen what they can expect over the coming three years.

Details about asylum seeker arrivals are being withheld – apparently the entire nation imagined the Coalition’s announced tow back the boats policy. Despite promising severe regulation of foreign investment, the government is now proposing to rush through free trade agreements. Now Joe Hockey has announced the details of their commission of audit, a well-used Liberal tactic to make drastic and punitive cuts to services, kept secret before the election.

Not only is this a government that isn’t doing what it said it would do; it doesn’t want to tell Australians what it’s really doing.

Over the last few years, Tony Abbott and Joe Hockey were unrelenting in their scaremongering over the state of the nation’s finances; Australians were told that “there is now a budget emergency”, and, worse, that Labor was “drowning the nation in debt”.

But, now in government, the Liberals tout some debt as “good” and the “budget emergency” appears to have disappeared. So much so, under the Coalition, the nation can now apparently afford a $500bn debt ceiling. So much for the “budget emergency”.

Just pause for a moment and imagine the extent of Hockey’s hyperventilation had a Labor treasurer proposed such an increase.

The new treasurer has flagged higher infrastructure spending funded by government borrowing – that is, by debt – and the assistant infrastructure minister, Jamie Briggs, blithely suggests thinking “more broadly” about using the Commonwealth balance sheet.

Of course, when Labor borrowed to invest, Abbott and Hockey declared a “debt crisis”, but now they are finally being honest that some borrowing can be smart.

The fact is, if the nation really was drowning in debt as many of the Liberals had been hysterically asserting, the last thing a conservative government would be doing is flagging more debt and more spending.

And, if there really were a budget emergency, they would be publishing their budget update well before the country goes on its summer holidays.

By their own words and actions post-election, the Coalition not only underline their pre-election dishonesty; they also confirm the true state of the budget and the economy.

Because the reality of the economic and fiscal circumstances the Coalition inherited is far different from the confidence-sapping slogans that characterised their time in Opposition.

The facts are these: Australia’s public finances are sound. Under Labor, Australia received AAA credit ratings from all three ratings agencies, our net debt position as a share of the economy remained low, and it peaked at a small fraction of the level seen across major advanced economies.

Over the six years Labor was in government, Australia’s economy grew by 14%, nearly a million jobs were created, and we came through the global recession in far better shape than most of our global peers.

We fostered a fairer society, taking a million people out of the income tax system by tripling the tax free threshold, giving 3.6 million workers a tax break, and boosting the retirement savings of over eight million Australians.

We took decisions to improve the structural position of the budget, many of which the Liberals opposed, even though these decisions created room to fund important long-term investments for the nation’s future including the Better Schools Plan and DisabilityCare.

Of course there was more reform to do. There always is.

And it is also true that we could have done more to communicate Labor’s achievements, which were often drowned out by too much other noise, much of our own making.

But the fiscal and economic facts cannot be denied. It is Labor’s strong economic management that today enables the Liberal Government to contemplate more debt, more spending.

These are the facts that stand clear in the face of the dishonest scare campaign on debt that now even Abbott is backing away from.

Australia's missing budget emergency | Penny Wong | Comment is free | theguardian.com